Key Takeaways Stronger dollar and CME margin hikes add pressure, causing precious metal prices to fall.Gold and silver pullbacks highlight the need for alternative defensive ETFs.Value, quality and consumer staple ETFs can cushion portfolios in turmoil.Gold and silver posted their steepest declines in years, reversing sharply after a powerful rally that had pushed prices to record levels. Gold prices, which have added about 66.08% over the past year and 37.25% over the past six months, have fallen roughly 1 ...

Core Viewpoint - U.S. stocks experienced significant declines on October 10, 2025, following President Trump's threats of increased tariffs on Chinese goods, citing China's new restrictions on rare earth metals as a catalyst for market instability [1][2][3]. Market Reaction - Major U.S. indexes saw steep losses, with the Dow Jones Industrial Average falling 1.9%, the S&P 500 dropping 2.71%, and the Nasdaq Composite declining 3.56%, marking its largest one-day drop since April 10 [2]. - The announcement led to a surge in market volatility, with the iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) increasing by 12.8% on the same day [5]. Trade Relations - President Trump indicated a cancellation of a planned meeting with President Xi at the APEC summit, stating that there was "no reason" to proceed with the meeting due to escalating trade tensions [3]. - New export restrictions imposed by Beijing require foreign companies to obtain a license to ship products with over 0.1% rare earth content, effective December 1, raising concerns among investors [4]. Investment Strategies - In light of market volatility, investors are advised to consider defensive investment strategies, such as long/short ETFs, which can provide both profit opportunities and protection against market downturns [6]. - Several long/short ETFs have outperformed the S&P 500, which was down 2.8% last week, highlighting the potential for these investment vehicles in uncertain market conditions [7]. Notable Long/Short ETFs - The AGF U.S. Market Neutral Anti-Beta Fund (BTAL) increased by 2.6% last week and 3.2% on October 10, 2025, with an expense ratio of 1.58% and an annual yield of 4.17% [8]. - The AdvisorShares Ranger Equity Bear ETF (HDGE) rose by 6.4% last week and 3.1% on the same day, charging 380 bps in fees and yielding 7.71% annually [8]. - The Simplify Managed Futures Strategy ETF (CTA) saw a 1.2% increase last week but a slight decline of 0.6% on October 10, 2025, with a yield of 4.25% and fees of 76 bps [9][10].

Economic Overview - The U.S. economy added only 73,000 jobs in July, significantly below the expected 104,000, with downward revisions in May and June erasing a total of 258,000 jobs, marking the largest two-month revision since May 2020 [1] - The unemployment rate increased to 4.2%, aligning with forecasts but remaining near historic lows [1][2] Market Reactions - Wall Street analysts are reassessing their economic forecasts due to the disappointing July jobs report, indicating a potential loss of strength in the labor market [2] - Following the weak labor market data, market expectations for a Federal Reserve interest rate cut in September surged to 80%, up from 38% the previous day [3] Federal Reserve Insights - Leslie Falcone from UBS Global Wealth Management anticipates the Fed will begin cutting rates in September, with a total of about 100 basis points in consecutive cuts [4] - Fed officials had previously expressed concerns about labor market softness, which now appear to be validated [5] Trade Tensions - Recent escalations in trade tensions, including a surprise 39% tariff on Switzerland by President Trump, have added to investor uncertainty, catching markets off guard [6] Investment Strategies - In light of economic uncertainty, investors are advised to consider defensive exchange-traded funds (ETFs) that may provide stability [7] - Specific ETFs mentioned include: - Invesco QQQ Low Volatility ETF (QQLV), which tracks low volatility stocks within the Nasdaq-100 Index and charges 25 basis points in fees [8] - Cullen Enhanced Equity Income ETF (DIVP), focusing on large-cap, dividend-paying companies with a yield of 7.31% and charging 55 basis points in fees [9] - S&P 500 Dividend Aristocrats ETF (NOBL), targeting companies with a history of increasing dividends for at least 25 years, charging 35 basis points in fees [10] - First Trust Utilities AlphaDEX Fund (FXU), designed to identify stocks from the Russell 1000 Index that may generate positive alpha, charging 63 basis points in fees [11][12] - US Aerospace & Defense iShares ETF (ITA), measuring the performance of the aerospace and defense sector, charging 40 basis points in fees [13]